tv [untitled] April 7, 2012 4:30am-5:00am PDT
it was an attempt to say that the general basket of services is what we want you to keep doing going forward. this was achieved by averaging. a couple are out of their control. charity care comes in based on the emergency room. there is not a lot of control. >> i imagine they would not. they would not be able to turn people away if they showed up.
>> around the various areas such as housing, the areas of the work force issue, who is in charge of enforcement. how was this working? >> the gentleman sitting to your left for enforcing and monitoring the agreement because there is so much health care related stuff in there and we have made it clear that the
director of health or barbara garcia is in charge of that piece. this requires an annual report specifically laid out the performance on all of the obligations in certifying that that is true and correct. the two directors are responsible for determining whether they are in agreement with that determination and i am pretty sure that the termination is a public document that can be looked at by anyone. >> they need to certify that
this is true and correct. i will check with my colleagues but i believe that we have audit rights. i don't know if there is an annual audit every year but if there was something fishy, we would be able to go in and audit. everything except the health obligations are on their face obvious. they wrote us a check for a certain amount of money. some are more complicated. my understanding is that we have invited them to be easily discernible by the health department.
>> with regards to the bounce -- it down payment system, there will be five payments of $5.8 million made to the mayor's office of housing. they will then administer the program i am assuming using the same teams that currently administer the payment program. the advantage of doing this in houses that we have existing agreements with, these are three banks that have agreed that they are on board with this program. they have agreed to be with this as well. this is our ability to roll it out. the one interaction is that as the applicant comes in, there will have to be some proof of
employment and the mayor's office of housing will essentially notify them of the application and the proof that was presented and they will prove that this applicant was in fact and employee. that is the primary interactions throughout the administration of the program but this will be done in house. "and then the enforcement around the jobs, they are still negotiating that. we regularly hear that this is city build. >> in some cases, i don't know if you are looking at that. >> i have staff that does that
as needed. this will be a little unique because we have various agreements that are for the source. these are more retell focused. these are based on partnerships that we have with this epo. it would be the same process. >> i think that covers all of my questions. we are talking about the initiation project, this would be later.
>> this is around the enforcement, what would it take for the planning department to do that and would we need a new staffing or would that happen with existing staffing? >> i think most -- as said, most of the non public health care side of the agreement is fairly quantifiable. this goes to the department of public health and their needs and the aspect of it. maybe if i can get them to answer it. >> we feel pretty comfortable. we have contract staff for $800 million a contract. i have asked for the staff member to do that. we are going to do this with
existing staff. >> thank you. >> i have some questions. so, with regards to the public process, that there is in and will report that is given to the director of planning and public health, is that going to be made public willingly or does this need to be asked for? >> you know, i am pretty sure that any such document is public and i will turn around and see if there is fine print and i am not sure about it but i would go out and get these reports and make sure that they are put on the web site. >> there are actually two steps. they give barbara and i a report which we can make public and then we prepare our report. >> i am glad there is a
provision in there that it will be reported to the health commissioned over here. that would be very public. >> i have questions around housing. i wanted to clarify about the comments on the program, employees have to buy into san francisco. >> that is correct. >> why the decision to segment out a portion of the money for the program? >> i think when we were looking at this obligation in the beginning of the process, we had gone through several steps to analyze what the obligation under the special use district would be. at that point, i was actually on side of the building.
we had done an analysis essentially of the merit of square footage of unoccupied commercial space and nonresidential space at the hospital was going to build under their plans and then we calculated that. the residential obligation ended up being around 1.1 million square feet. based on that number, we calculated the number of units that did be if you estimated that it was about a thousand square feet per unit and then from that, we backed out of the number of inclusion air units it would take to fulfil the affordable housing obligation and that ended up being about 220 is because we assumed everything that was going to be done would be done off site. the calculation was based on a
fee out calculation. when you have 220 units and you feed out, -- the underlying cultivation was either the unit count or it was the monitoring station for $73 million. the poll was the same, to meet . as we were negotiating, we knew that based on the corpus in the negotiation that we wanted to try to find a way of fulfilling that obligation that met our goals but was also flexible. i think that is how we landed on what we call a rather unique program of essentially providing the city with some immediate money on affordable housing providing their employees and also the city with what i would argue is a sustainability
benefit of trying to locate a number of their employees within the city and then on the back end, the remainder of the affordable housing obligation. i want to remind the commission that we are getting the entire obligation through this. the payment that will currently be made to the city in terms of
what they will pay is 29 million. we will see appreciation on that number. in terms of that unit count, it exceeds the 220 of the local contribution of the cost of production. in terms of the actual uses of the dollars, we believe that we are using it once, 29, the other, 35. we have a pretty creative approach to addressing that obligation. >> i want to make sure that i understand the program. let's say that this is an average cost to buy a home and you are getting out to to $1,000, then the owner needs to pay a $400,000 mortgage. i just have some questions about whether or not that is doable. a lot of people pay up to 4% of
their income for their mortgage or their rent, that is not ideal but that is a stretch for people. >> based on some analysis we have done and making that to some of the data that we have been able to produce for the middle income housing steady, a person who is at 1% currently can't afford roughly 15% of the homes in san francisco just as a function of their existing income. if you add a $200,000 loan which is the maximum, that would essentially increase their buying power to that of a household of $100,000 which puts them in a position to afford about 40 of the housing. in terms of dollar amounts, what that means, this is a little bit in precise and we have more precise data but in terms of
someone at 100%, i believe they can afford a home currently as is in the range of about $400- $450,000 in terms of cost. if you add this program on top of their existing income, that puts them in a range where they can afford a home in the 600 range. >> i think that is right. if you buy the home at a $600,000 prize, your monthly mortgage goes up, right? >> again, the monthly mortgage will be broken out into two pieces. there will be a prime mortgage which is the market rate mortgage which they will have to pay on. in that situation, if you would have won mortgage from wells fargo, citibank, whatever, and
then you make payments on that. at 100%, as you could afford that mortgage without any subsidy. the to 1000 mortgage is something that we called a silent second mortgage and it is silent because you don't have to make any payments on it. this city does not get repaid until you sell the property at which point the borrower has to pay the entire $200,000 back. >> thanks. that is all. >> >> could you do a little research with the real-estate industry? i don't think that at 100%, you could get a loan for 400,000. i could be wrong but i have tried to finance my condo and i cannot get anywhere and it is not near the worth 400,000.
-- >> i don't think that there are provisions in here about what happens when someone defaults on the loan. >> that is correct. the provisions in the development >> that i know of, that is something that he can speak to the we have a default provision which would be applicable in this situation if because the way we are structuring his program is we're taking the existing rules and then we are laboring and a couple of additional items on top of that, one is increasing the maximum loan amount, the second is making it eligible only to be cpmc employees. in terms of the default provisions. >> as long as they will be in
place once the person comes and actually applies for it. you are saying with the department, those departments, they have those in place. >> >> commission more has to do a quick follow-up. would you mind following up with staff? >> i actually sees the opposite from the people i know in the middle range of affordable housing and those people have to realize that there is. >> the staffing comes from the data that the mayor's office of housing and looked at for their existing program. the average holding is a years.
that is what we use in order to try to do the protections that we did. in terms of the $6 billion appreciation, we based that on an annual rate of appreciation of 3% and we were trying to be conservative. we can model them differently based upon different datasets and we're happy to do that. >> it might be interesting to hear that. >> did you have something to add? >> since i have the information, the people were very focused on how we structured the program. i would like to answer some of the questions. part of what we did is we basically when we created this
program, we said, what do we have existing to model for what we're trying to do? we asked the staff of the mayor's office of housing to basically do some research on the history of the downpayment assistance loan program and they pulled together 239 loans that they issued between 2005, 2011. the average unit price was $400,000. the average assistance was $82,000. this covers the boom and bust but it does not cover both. people were able to find homes under this program at half the down payment assistance that we
are looking at under this model. that was a concern of cpmc and the mayor's office that if we were going to propose a program, it was going to work. we looked at these numbers and we feel pretty confident that people will be able to find homes in san francisco with the down payment assistance about. among the things i wanted to to tell you was the average bedroom size of these homes was two bedrooms. on average, obviously some of people are buying one veterans our studios but on average, people are buying family-sized apartment or homes. the other part of the program is a reflection of what will happen to the housing market. having a 200,000 downpayment
assistance gives you a lot of opportunities in san francisco today. when we did the studies, there was the city and the opportunities to create new home buyers with this program. going back to the question of the defaults, these are subordinate loans to the primary lender and we have our rights under the default to share in any of the proceeds of the share. we are supporting it to the lender because otherwise the first lender would not make the loan. under the question of can you actually get mortgages for your down payment assistance program, we are in a situation where the demand is so great
that we have actually reduced the amount from 100 to 70 so we could stretch out the loans because the demand is great. this is a very different time on the market for the first loans and this is not a question of the commissioners credit for the location and the property. this is a very difficult time. people who would have easily gotten loans and properties that would have easily gone loans are being given the runaround. there is much more scrutiny than ever before. we have looked at this and we will bring this additional information back to you about what is the maximum first loan. we will talk more about our lending partners and their willingness to participate.
the best way to do this is to see if they are currently participating. >> on the same question, there is no prohibition for hypothetical buyers putting into some of their own money for to make it more affordable. >> we will provide 45% of the total value and we strongly believe that there should be some participation by the home buyer as the down payment. again, many of the people who have purchased loans also put their own downpayment assistance into the transaction. this is not just the first loan and the city loan but there is also personal money in the transaction also. >> thank you.
>> if i heard you correctly when you spoke, you were talking about the area and a discrepancy between the area and the san francisco meeting and there are reasons why you use the area and not the local and what would that difference be. be? >> there are multiple definitions. the definition we have in this agreement is based upon the three county definition of area median income. there is a san francisco version of the area median income which is 10% less, there is a state definition of san francisco area median income which is 10% to 15% greater. we took the one in the middle. the three-county area. >> is that the when you use for
your normal program? >> yes, it is. commissioner antonini: going on from there. i was pleased today that we heard from some voices we have not heard from before. although it's difficult when you try and read through an agreement such as this because of its technicality. i have read through the development agreement. i did so for many reasons. principally because as the body had said much earlier, and as many of us have said going way back, we're not going to consider anything regarding cpmc's rebuild unless there was a development agreement in effect and now it is not. it is a long way from where it was. i went back and took a look at
my notes from june 9 of last year which is approximately when the mayor put out what were termed -- his asked. i had some disagreements with them. i thought they fell short in some instances but others were on track. i am pleased things have moved to where they are now but i still have some questions. dr. norale made a statement in her presentation for minker san francisco needs -- her presentation that san francisco needs st. luke's hospital. i had mentioned this last june that it is a 20-year guarantee and i have a great deal of
problems with that. i stated at that time something in the 35, 50-year would be much more to my liking. as much as i was pleased to hear dr. norale's statement, i am still questioning the 20 years. it is not a deal killer for me, i do not mean it that way. i still think it is short. the concurrent construction of the two which was a question early on in the agreements and those of you who have not heard me before have to know that i go back nearly 10 years ago when the rebuild was to be at the california campus. i have been following this for a long time. but the concurrent construction i think definitely worked. sutter's obligation early on and i say sutter